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The News / The Economist (Licensed): Take consumer spending first. Evidence from earlier pandemics suggests that during the acute phase people behave as they have during the past year of covid-19: accumulating savings as spending opportunities vanish and it becomes risky to go outside. In the first half of the 1870s, during an outbreak of smallpox, Britain’s household-saving rate doubled. Japan’s saving rate more than doubled during the first world war. In 1919-20, as the Spanish flu raged, Americans stashed away more cash than in any subsequent year until the second world war. When that war hit, savings rose again, with households accumulating additional balances in 1941-45 worth some 40% of GDP.
The Analysis: This is a wider scope than what's customary for the Monday Letter but shifts in consumer behavior (and pent up demand) will have an impact across a number of industries to include: physical retail, DTC commerce, travel, and other services. I've alluded to the potential that the next years will have as pent-up consumer demand shapes the economy. In Spring 2021, I explain:
The “Roaring Twenties” of the 20th Century was a boom period in new construction, new infrastructure, pent up demand, and new forms of art. The “Roaring Twenties” of this century will see a similar boom in new construction, high speed internet and commerce adoption, pent-up demand, and creator-driven dynamism.
NFT creator, investor, and author Li Jin recently shared her thoughts on the potential of creator-driven economic dynamism here. We are already seeing some of this with the boom in NFTs, media monetization / consumption, retail investing, and overflowing (Class A) malls. Brand performance tells a story, as well. In the past month, Away has risen from No. 369 to the mid 60s in growth, signaling an fever hot anticipation for summer travel. If history is any indication, the next years will be strong for those with means (and the consumer brands appealing to them). But as I've written, the Roaring 20s won't be for everyone, while frivolous spending and wagering will mark the moment, many in the middle and working classes will continue working to recapture what economic stability was lost. Additional reading is below.
The Roaring 20s (2PM)
The Gilded Age 2.0 (2PM)
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Audio / The Verge: The NFL will host a series of draft-themed rooms on Clubhouse beginning Monday and throughout the week, which will include player assessments, a mock draft for fans, and a conversation with football team alumni from the University of Alabama.
2PM Analysis (Hilary Milnes): The app landed perhaps its biggest-profile partnership so far over the weekend, signing a deal with the NFL for exclusive programming around the upcoming draft. The NFL will host a series of Clubhouse rooms around the draft for interviews, questions-and-answer opportunities and other discussions around potential picks and players. It’s the first sports league to partner with Clubhouse, and it demonstrates how Clubhouse’s functionality can be used to rally fans around an event and enhance typical procedurals with extra, exclusive content. It’s also more interactive than other mediums, like a podcast series or TV cast.
At the same time, the Clubhouse-is-dead stories are starting to flow in. For Vanity Fair, sources say Clubhouse sign-ups, downloads and engagement numbers have slowed dramatically; a Business Insider report shows downloads of the iOS app fell to under 1 million in April after a peak in February of nearly 10 million. The article ties Clubhouse’s slow down to the increase in vaccinations and overall lessening of pandemic-related restrictions. When the world opens up, Clubhouse chat rooms have less of a gravitational pull.
Big tech companies responded quickly to Clubhouse mania with copycat development, and those projects are underway. It’s worth considering that the medium will fold itself into the overall arrangement of how we connect with and hear from others. If you can command an audience in an audio chat room, you can likely find said audience. For Clubhouse itself, it’s facing a turning point, and its biggest weakness is availability. The Android development should be its first priority, as well as getting the app out of beta.
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Consumer Psychology / Snaxshot: Just sit with this for a minute, millennials (born 80-95) grew up at a time where we were being indoctrinated into consumerism under the guise of cartoons — even our parents were duped. Marketers were able to come up with “nag factor” a study in which they figured out how many nags would convert parents into a purchase. Even before 90s kids were born, marketers estimated our generation would be worth trillions as children. It wasn’t just toys — it was sugar cubes masked as healthy cereal, our parents believed that it was GRRRRREEAT for us to wash it down with more cartoons literally created to hook us on a culture of wastefulness and mindless consumerism.
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DTC Health / Thingtesting: The promise of a personalized medical dashboard is compelling — but is the data these companies provide accurate, or is it all just a gimmick? We spoke to Dr. Harvey Kaufman, medical director at U.S. lab-testing giant Quest Diagnostics, for some insights.
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Ad Rem / Inspired by the growing popularity of beverage CPG, we curated nine products across three categories for your enjoyment: alcoholic, non-alcoholic, and health-inspired.
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A. Digitally Natives / Teen Vogue: This fun, inclusive, affordable approach to underwear is the brainchild of Cami Téllez, the company’s CEO, who co-founded Parade in 2018 while she was still a student at Columbia University. In the two years since, the company has sold over 1 million pairs of underwear, and sales have picked up during the pandemic.
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B. Digitally Natives / Retail Dive: For Andie, the launch into intimates came after a year of research and development. The focus is on "exceptional fit," and customer feedback and learnings from its swimwear category have informed the launch, according to the company.
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A. Linear Commerce / Technode: Central government agencies including the Cyberspace Administration of China, the Ministry of Public Security, and the commerce ministry rolled out on Friday new rules targeting the livestream eCommerce space that will go into effect on May 25.
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B. Linear Commerce / South China Morning Post: This initiative includes the launch of its own mobile payment service Douyin Pay, strategic expansion into the video games industry, an education drive and local services push.
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eCommerce / Bloomberg: Cohen’s goal is to push the company rapidly into eCommerce, and according to people familiar with his thinking, he plans to borrow heavily from the model he implemented at Chewy to pull off that transition.
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Fashion / Vogue Business: The tool gives young designers access to high-quality fabrics at an affordable price. It’s all the more advantageous for young designers because they are usually obliged to pay more when ordering smaller quantities.
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eCommerce / The Information: Gopuff’s ambitious goals hinge on resolving a host of uncertainties, including whether the company can attract and retain enough drivers, fix persistent technical issues and compete with rivals such as Uber Eats and DoorDash.
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Streaming Economy / New York Times: Over all, AT&T counted 44.1 million subscribers to HBO and HBO Max in the United States at the end of March, a gain of 2.7 million from the previous quarter.
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Retail Real Estate / Axios: Amazon — a major contributor to the mall demise — is using old mall space for fulfillment centers, NBC News reported last week. Part of a downtown shopping mall in Vermont is now home to a high school, the AP reported.
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A recent fireside chat between Parade co-founder and chief executive Cami Tellez and a small, private group of 2PM’s Executive Members was more than enlightening. It ended with one attendee proclaiming, “I was nothing at 23 years old” (Tellez is 23), and another confirming, “She’s ahead of the curve.” One of those responses was from a heralded retail executive with a decade of helping some of the most visible brands in America develop omnichannel presences. Every other member in attendance was equally esteemed in their own right.
Tellez represents many of traits familiar in the high-growth, modern retail industry, detailed in books like Lawrence Ingrassia’s Billion Dollar Brand Club. You know the commonalities weaved in and out of brands like Warby Parker, Away, Casper, and so on: the Ivy League pedigree, the summer internship with the well-respected Tusk Ventures, proximity to New York (or Los Angeles), and a coveted role with Rough Draft Ventures. But what separates Parade from earlier brands at similar stages is a combination of three attributes: profitability, supply chain management, and arbitrage in consumer behavior.
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